The United States dollar crisis is now hitting the Maldives,\npresenting both an economic problem and a political test for President\nMohamed Muizzu.<\/p>\n
The scarcity of foreign exchange is making it difficult for\nbusinesses to pay overseas suppliers, while the government must maintain\ndollar availability for imports and debt repayments.<\/p>\n
Quoting The Diplomat on Wednesday (26\/09\/2026), the crisis is\noccurring as the Maldives faces substantial external debt obligations.\nThe burden of debt payments falling due throughout 2026 reaches\napproximately US$1.7 billion (IDR 30.4 trillion), putting significant\npressure on foreign exchange reserves.<\/p>\n
The Muizzu administration argues that much of this burden is a legacy\nof the previous government. However, the current administration is also\ncontinuing to pursue large-scale infrastructure projects.<\/p>\n
Pressure has intensified after the Maldives paid a US$500 million\nsukuk and completed a US$400 million currency swap facility with India.\nWhile these payments helped avoid default risks, they simultaneously\nreduced the supply of dollars available to the domestic economy.<\/p>\n
Black Market<\/strong><\/p>\n The dollar shortage has reportedly forced several businesses to wait\nweeks to settle payments with foreign suppliers. This condition has also\nspurred activity in the informal foreign exchange market.<\/p>\n In response, the government has tightened foreign exchange trading.\nSince September 2026, the sale of foreign currency above the value set\nby monetary authorities may be subject to criminal sanctions.<\/p>\n The government has also taken a controversial step by requiring\ncertain categories of resorts to convert 40% of their monthly foreign\nexchange earnings through local banks. This policy came into effect on 1\nSeptember 2026.<\/p>\n The government maintains that this policy is necessary to ensure more\ndollars from the tourism industry enter the domestic banking system.\nHowever, tourism industry players have questioned the policy, noting\nthat resorts also have various dollar-denominated obligations, including\noperational costs, salaries, rent, and foreign debt.<\/p>\n Attacks on the President<\/strong><\/p>\n The dollar issue has now become political ammunition for groups\ncriticising the Muizzu administration. Former President Abdulla Yameen,\nfor instance, has criticised the 40% resort revenue conversion mandate,\ncalling it a sign that the government has failed to manage foreign\nexchange issues.<\/p>\n The government has refuted these criticisms, stating that the policy\nis necessary to increase the domestic dollar supply. President Muizzu\nhimself stated that the policy aims to improve the circulation of\ndollars within the country and assist in meeting essential import\nneeds.<\/p>\n Economic Minister Mohamed Saeed echoed this sentiment, asserting that\nthe government has taken steps to address the foreign exchange issue and\nprotect the Maldives from the risk of bankruptcy.<\/p>\n This situation becomes increasingly critical as Muizzu faces the next\npresidential election in 2028. Consequently, the government\u2019s ability to\nmanage the dollar shortage, maintain imports, and meet debt obligations\ncould become a pivotal part of its record in the eyes of voters.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/president-under-pressure-as-nation-faces-sudden-dollar-crisis-1790178706",
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"sponsor": "Okusi Associates",
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